BERLIN | By Alberto Lozano | At the end of the week, good news are coming from Germany’s trade data. After calendar and seasonal adjustment, German imports rose by 4.5% on the month, rebounding from a sharp fall in May (-3.4%) with the highest month-on-month increase since November 2010. In addition, German exports increased by 0.9%, narrowing the criticised surplus to 16.2 billion euros from 18.8 billion the previous month.
MADRID | The Corner | The positive evolution of the American economy and the uncertainty about Europe’s economic recovery, after disappointing data published this week, have led the USD to Euro exchange rate to advance to its highest best level in nine months.
MADRID | The Corner | The fall in inflation in July to 0,4% YoY and a still high unemployment rate of 11.5% in the Eurozone show that the policy measures the ECB announced in June are going to take some time to reach the real economy.
MADRID | The Corner | We’re in the middle of second-quarter earnings season and companies are showing their cards to investors. Note the difference on both sides of the Atlantic: in the US, 53% of S&P500 firms have posted their results and 78% have performed better than expected (average surprise of 6%, JP Morgan analysts pointed out). EPS growth is of 11% yoy, while sales went up by 5% with 67% of companies having better than expected numbers. Meanwhile in Europe, with 152 SXXP companies having posted their results, 56% have turned in an average +0.4% EPS. Year-on-year EPS has risen by 18% (8% if we exclude financial entities), although yoy sales decreased by -2%.
ZURICH | The Corner | UBS team reduced on Thursday their Overweight in Global Equities. In the near- term, they see some deterioration in the risk/return trade off, following a large re-rating in equity markets. However, the context is that they are coming from their largest ever Overweight in Equities and that it still remains their favoured asset class (with European Equities as an Overweight).
MADRID | The Corner | The disappointing German ZEW together with the worsening of the Portuguese lender Banco Espirito Santo (BES) crisis weighed down on the markets on Tuesday. And that about today? Indeed, the banking sector will continue to be the main player in Europe with the BES drama as backdrop, although the calmness within the peripheral bonds markets is a positive sign and indicates the limited extent of such crisis.
MADRID | By The Corner | Experts at Morgan Stanley consider that Portugal is now a good opportunity due to its current technical levels. Since the Espirito Santo incident, the PSI20 has plummeted by 17.5%, but these analysts see a potential technical recovery of 10-12%. The Portuguese treasury has covered its entire financing needs for 2014 and is now raising funds for 2015.
Europe’s leaders avoided their usual muddling through complacency to do something radical — and it worked. Europe’s banking union, constituting a supranational pooling of most instruments of banking policy, was established over two years ago, in the early hours of June 29, 2012. To a greater extent than was initially realized by most observers, this step marked a watershed in the European crisis by making it possible for the European Central Bank (ECB) to stabilize sovereign debt markets.
MADRID | By Francisco López | The first world power is doing worse than expected. USA’s GDP decreased in 1Q by 2.9% year on year, nearly three times the 1% foreseen just a month ago and far from 1.8% that Wall Street expected. European stock markets, unlike the American, reacted immediately with heavy losses. Spanish Ibex 35 leaded the way losing 1.25 and finished below 11,000 points.
MADRID | By Álex García